Giving to donor-advised funds surges on expiring tax cuts and a hot stock market

• A record 74% of contributions were non-cash assets including stocks, ETFs, real estate, and cryptocurrency, allowing donors to avoid capital gains taxes while getting immediate deductions
• The 2026 tax changes reduce benefits significantly: charitable deductions are now capped at a lower rate for top earners, and itemizers can only deduct donations exceeding 0.5% of adjusted gross income
• Tax advisors encouraged clients to front-load their DAFs with 3-5 years of contributions before the tax law changes took effect, though this may shift behavior away from spontaneous 'checkbook philanthropy'

Summary: Surge in Donor-Advised Fund Giving Driven by Tax Changes and Market Performance

Key Figures:

DAFgiving360, a major donor-advised fund (DAF) administrator, reported record charitable grants of $9.9 billion in 2025, representing a 28% increase ($2.2 billion) from the prior year. Non-cash asset contributions reached a record 74% of total donations, including ETFs, index funds, real estate, and cryptocurrency.

Main Driver:

The surge was primarily driven by the passage of Trump's "One Big Beautiful Bill Act" in July, which reduced tax benefits for high earners starting in 2026. Tax advisors encouraged wealthy clients to front-load 3-5 years of charitable contributions into DAFs before the changes took effect.

Tax Law Changes:

• Effective tax benefits of charitable giving have been capped for top earners
• New limitations restrict itemizers to deducting only donations exceeding 0.5% of adjusted gross income
• Example: A taxpayer with $2 million income receives no tax benefit on their first $10,000 in annual giving
• The Indiana University Lilly Family School of Philanthropy estimates these changes will reduce overall giving by $4.1 billion to $6.1 billion annually

Market Implications:

The strong stock market performance in 2025 facilitated increased donations of appreciated assets. DAFs offer wealthy donors immediate tax deductions while allowing them to distribute funds to charities over time, and they simplify the process of donating appreciated securities without triggering capital gains taxes. However, experts anticipate the tax changes may shift behavior away from spontaneous charitable giving toward more structured philanthropic planning.